Investors forecast a pick-up in inflation which in turn could push bond yields higher
Wall Street stocks finished marginally lower overnight amid the resurgent Treasury yields due to the risks higher inflation poses to consumers and companies. As such, the S&P 500 slipped 0.02%, the Dow Jones Industrial Average fell 0.16%, and the tech-heavy Nasdaq Composite lost 0.36%.
Today in Asia, equities were mostly higher amid strong economic data out of China. Exports rose by over 30% in March from a year earlier, while imports jumped 38%, their fastest pace in four years. Japan’s Nikkei 225 gained 0.72%, South Korea’s Kospi added 1.07% and Australia’s S&P/ASX 200 inched up less than 0.1%. However, the Shanghai Composite in China bucked the trend to shed nearly 0.5%.
European stocks opened little changed amid rising uncertainty ahead of U.S. inflation data for March due later today. Investors forecast a pick-up in inflation which in turn could push bond yields higher and put stocks under selling pressure. The beginning of corporate earnings season makes investors nervous as well. The pan-European Stoxx 600 inched just 0.1% above the flat-line in early trade. On the data front, U.K. GDP grew 0.4% in February from the previous, slightly missing economist expectations of a 0.6% expansion.
Meanwhile, the dollar remains mixed on Tuesday but could push north across the board if the upcoming inflation data points to a strong rise in consumer prices. EURUSD came off session highs to settle around the 1.1900 figure during the European hours. On the downside, the immediate key support arrives at 1.1860. Downside risks remain limited as long as the pair stays above the 20-DMA, today at 1.1842.
In other markets, bitcoin price has finally surged to fresh all-time highs for the first time since mid-March. The BTCUSD pair exceeded the $62,000 figure to set new record tops around $62,700. Now, the next target arrives at $63,000.